Fundamental & Technical Outlook

Macro

As 2022 enters Q4, gold, silver, copper, oil, and other commodities all seem overvalued in technical terms and could fall 13% or more according to Credit Suisse.

On Thursday, U.S. markets ended sharply lower on worries that the Federal Reserve's aggressive fight against inflation could hobble the U.S. economy.

Markets also continued to wrestle with the newly installed British leadership's economic policy of tax cuts and expanded spending to pull the country from its current doldrums. Observers of the U.K. are concerned that the moves will exacerbate its high inflation.

The Bank of England on Wednesday promised to buy long-dated bonds "on whatever scale is necessary," sending the yield on the 30-year gilt down by a full percentage point in the span of just a few hours. The pound is at its 37-year low against the US dollar at $1.11.

The DJIA (-1.54%), S&P 500 (-2.11%), and Nasdaq (-2.84%) made above-average gains on Wednesday but slipped further into a bear market on Thursday.

Bitcoin (BTC) was trading at $19,513 (+0.12%) and Ether (ETH) was changing hands at $1,337 (-0.54%) as of this writing. Ripple (XRP) +6.75%, Polygon (MATIC) +3.58%, and Terra Luna Classic (LUNC) +3.2%.

🟠 BTC

Weekly timeframe

As of Sep. 30, Bitcoin (BTC) is showing strength above the red support zone ($17,624 - $18,960).

Looking ahead in the coming weeks, key resistance and support zones have been measured from various Fibonacci extension levels.

BTC Weekly Support zones

1. $17,624 - $18,960
2. $15,551 - $17,624

BTC Weekly Resistance zones

1. $18,960 - $19,858
2. $19,667 - $22,531

Daily timeframe

As of this writing on Sep. 30 00:23 UTC, BTC was trading at $19,500 (-3.4%) in a 24hr period.

On Thursday, the price of Bitcoin (BTC) was down 3% in early US session (12:00 UTC) but managed to rocket above day’s open by noon (16:00 UTC), showing immense strength in price action on the 1HR timeframe. The buying pressure is extending into Friday early Asian session (12:00 UTC).

BTC Daily Resistance zones

1. 19,488 - 19,707
2. 19,967 - 20,374

BTC Daily Support Zones

1. 19,077 - 19,413
2. 18,816 - 19,077

🔵 ETH

Weekly timeframe

As of Sep. 30, Ether (ETH) is showing strength above the first support zone in red ($1,060 - 1,264) but is trapped within two weekly trendlines.

The support zone is derived by using the Fibonacci extension tool, which generates three Fibonacci extension levels (127.2%, 141.4%, & 161.8%) measured from the plunge between Aug. 15 - Aug. 22, which coincide with the opening and close of the weekly candle on Jul. 4.

Daily Candle

As of this writing on Sep. 30 00:27 UTC, ETH was trading at $1,332 (+0.8%) in a 24hr period.

The price of ETH on a daily timeframe appears to have been extremely volatile in the past three days, trading in between 1,294 - 1,340. In the coming days, there are three resistance zones and support zones to keep on the lookout for.

ETH Daily Resistance zones

1. $1,356 - $1,378
2. $1,383 - $1,418
3. $1,392 - $1,435

ETH Daily Support zones

1. $1,303 - $1,328
2. $1,266 - $1,286
3. $1,243 - $1,277

📌 The topic of the Day: Warner Music Group partners with OpenSea

According to a report by Cointelegraph, global music and entertainment company Warner Music Group (WMG) announced a partnership with OpenSea on Thursday, Sep. 29. The collaboration will allow select artists to launch their NFT collections and limited-edition projects on their own customizable and dedicated drop pages.

Although OpenSea has a dedicated catalog for music NFTs, most artists prefer to launch on music-specific marketplaces such as Catalog, Foundation, Arpeggi, and FormFunction.

One could argue this is an issue of decentralization but the current majority of artists using this technology are big-name artists, as of this stage in NFT development. Audio NFTs and their corresponding merchandise are typically purchased by the wealthy.

After the successful Merge and Ethereum’s switch to PoS consensus mechanism, perhaps NFTs will make a comeback with more innovations as network gas fees decrease.

🗒 Happenings of The Week (Sep. 24 - 30)

• 🔹 EU policymakers criticize Amazon's role in ECB’s digital euro development and expressed worries regarding Amazon’s track record with the EU on privacy and tax issues. The prototype design phase is scheduled to wrap up in March 2023. Fabio Panetta, a senior ECB leader said Amazon may not be involved in potential next phases of the project.

• 🔹 Israel, Norway and Sweden central banks partner with BIS to explore CBDC payments. The BIS reported on Sept. 27 that a CBDC pilot involving the central banks of Hong Kong, Thailand, China and the United Arab Emirates was “successful” after a month-long test facilitating $22 million worth of cross-border transactions.

• 🔹 Brazil’s securities regulator asks Mercado Bitcoin to clarify token information. A crypto regulation bill in Brazil’s Congress has reached key milestones this year, but it has been stalled in the lower house since the Senate approved the proposal in April.

• 🔹 BlackRock launches ETF in Europe with blockchain and crypto company exposure. The iShares Blockchain Technology UCITS ETF is designed to track 35 blockchain companies from around the world and is listed on Euronext under the ticker BLKC.

• 🔹 Star Atlas offers first glimpse of gameplay with debut on Epic Games Store. Based on Solana and built using Unreal Engine 5, Star Atlas is one of the most ambitious gaming projects in web3. The project is aiming for a full Showroom with expanded functionality release in the fourth quarter of this year.

• 🔹 This week’s fundraising activities include but are not limited to: Carbon Credit platform 1GCX Raises $2 billion in a partnership with T3 Trading to tap ‘Internet of Energy’. Crypto investment firm Pantera Capital is seeking $1.25 billion for a second blockchain fund. Pantera’s portfolio includes companies like Anchorage Digital, Amber Group, Coinbase, Flashbots and FTX. Tech venture studio MPCH Labs raises $40 million Series A. The startup is developing a proprietary MPC6 engine based on multi-party computation (MPC) technology. Bitcoin payments firm Strike raises $80 million in a Series B funding round led by Ten31. Strike is building a payments protocol on Bitcoin’s Lightning network.

• 🔹 Christine Lagarde, president of the European Central Bank (ECB) said on Wednesday a digital Euro will not be used for commercial purposes and would protect people from data collection. The central bank announced the five partner companies that will help build the trial payment system earlier this month. The evaluation and results of the project are expected in March 2023.

• 🔹 A daily transaction cap for non-euro stablecoins has been reinserted into the European Union’s draft rules for cryptocurrencies. The newly reinstated provision puts a cap on how much foreign currency-backed tokens are allowed to be transacted within one day. The European Parliament’s Committee on Economic and Monetary Affairs is scheduled to vote on the legislation in October or November.

• 🔹 Interbank messaging service SWIFT has linked up with Chainlink Labs on a cross-chain interoperability proof-of-concept project. Chainlink oracles allow on-chain smart contracts and applications to utilize off-chain data in a secure and decentralized manner. It recently announced the SCALE program to grow decentralized application ecosystems in the Layer 1 and 2 space by helping with access and cost barriers to oracle services and configurations.

• 🔹 Lightning Labs releases initial Taro protocol code. This will allow users to issue and transfer assets on the Bitcoin blockchain and Lightning. The company first launched Taro, a Taproot-powered protocol, in April. Lightning Labs was founded in 2016 and has raised money from Square CEO Jack Dorsey and Robinhood CEO Vlad Tenev.

• 🔹 Terraform Labs Founder Do Kwon says he's 'making zero effort to hide' but declined to disclose his exact whereabouts. On Monday, South Korea says Interpol has issued a red notice for Do Kwon. Terraform Labs executives are wanted by the government for allegedly breaking capital market laws, following the $40 billion collapse of luna and terraUSD. On Tuesday, the Luna Foundation Guard (LFG) refuted claims from a CoinDesk report that suggested a wallet was set up for the LFG on Binance this month and linked to 3,313 BTS that authorities have sought to freeze.

• 🔹 IMF calls on global financial watchdog to lead crypto regulation push. Two new reports by the International Monetary Fund (IMF) on regulating stablecoins and unbacked cryptoassets have called on the Financial Stability Board (FSB) to set and lead global efforts on crypto regulation. The FSB reports to G20 officials.

• 🔹 Australia’s CBDC pilot is looking for industry participants to make submissions on CBDC use cases. Dubbed the “eAUD,” the pilot is currently in the research stages and will be tested by participants in January next year. Last week, The People’s Bank of China announced it was extending the trial of e-CNY to several new provinces including Guangdong and Sichuan.

• 🔹 California Governor Gavin Newsom vetoed a bill that would create a license for companies operating in the crypto space. Newsom wrote in a Sept. 23 letter to the California State Assembly, “A more flexible approach is needed to ensure regulatory oversight can keep up with rapidly evolving technology and use cases, and is tailored with the proper tools to address trends and mitigate consumer harm.”

• 🔹 Disney is hiring transaction lawyer for 'aggressive' NFT and DeFi plans. Disney CEO says the conglomerate is focused on “next generation storytelling.” Last year, it dropped the Walt & Mickey “Partners” NFT on the VeVe app for iOS and Android.

• 🔹 Ethereum gas fee has reached a two-year low. The number of users, transaction count on Ethereum, and transaction count on Layer 2s remain on a positive upward trajectory. Notably, interest in speculative NFT buying has dropped significantly.

• 🔹 China GPU prices drop to new lows after the Ethereum Merge. The Nvidia GeForce RTX 3080’s price dropped from $1118, or 8,000 yuan, to 5,000 yuan within three months, according to a Chinese merchant.

• 🔹 Hacker steals $950,000 from crypto vanity address as exploits continue. Hackers are continuing to steal cryptocurrency created by a tool called Profanity. The latest hack comes after Wintermute lost $160 million as a result of this issue.